About 70 groups are to bid for funding to create fuels from household and commercial waste.
Photograph: UIG/Getty Images

Airline passengers could fly to their destinations on jets fuelled by industrial waste or the contents of people’s dustbins if a government scheme succeeds in creating a new green energy source.

The Department for Transport (DfT) is offering £22m of funding for projects to develop low-carbon, waste-based fuels for planes and lorries. About 70 groups want to bid for funding.

The move follows the introduction of grants to encourage the take-up of ultra-low-emission electric vehicles, and plans to ban all new petrol and diesel cars by 2040, amid fears that rising levels of nitrogen oxide pose a major risk to public health. The government has identified poor air quality as the biggest environmental risk to public health in Britain.

DfT data show that aircraft and lorries powered by waste fuels could use up to 90% less carbon than if they were powered by traditional fossil fuels. Planes and lorries are too heavy to use electric power.

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The transport minister, Jesse Norman, said: “We are committed to cutting carbon emissions and promoting new environmentally friendly fuels that will help us meet that goal. We are making funding available to innovative businesses, which will lead the way in developing alternative fuels that are efficient, sustainable and clean.

“We want every new car and van in the UK to be zero-emission by 2040, but we know lorries and aeroplanes will rely on more traditional fuels for years to come, so we must promote environmentally friendly alternatives.”

There are hopes that the government funding will help create five new low-carbon fuel plants by 2021. The DfT believes low-carbon transport fuels made from waste could be worth £600m to the British economy by 2030 and support up to 9,800 new jobs.

• This article was amended on 28 August 2017 to remove a mistaken reference to the FTSE 100.